Norway may invest in nuclear weapons manufacturers again. New report reveals conditions
Norway’s Government Pension Fund Global (GPFG) may change the rules governing oversight of its investments. The Council on Ethics (Etikkrådet) would retain its independence but lose the right to recommend excluding companies. Decisions would be made by the Central Bank of Norway (Norges Bank). The new rules could pave the way for investments in nuclear weapons manufacturers.
Pictured: committee chair Svein Gjedrem and Finance Minister Jens Stoltenberg.
Fot. Statsministerens kontor, regjeringen.no
On Thursday, 15 October, a committee led by former central bank governor Svein Gjedrem submitted a 434-page report to Finance Minister Jens Stoltenberg. The document presents proposals for changes to the GPFG’s ethical guidelines. The fund plays an important role in financing Norwegian public expenditure. Stoltenberg said that more than NOK 600 billion, or one quarter of all funds, is to come from the fund in next year’s budget.
Council to retain independence. Bank to make decisions
The Council is to continue assessing the risk of serious breaches of ethical standards by companies in which the GPFG invests. However, its findings will no longer include recommendations for specific measures, including excluding a company from the investment portfolio. Norges Bank will take over the selection of appropriate measures. The committee justifies the change by citing the bank’s overall responsibility for managing the fund and pursuing a responsible investment policy.
The threshold for excluding companies is to remain high. Under the proposal, Norges Bank should primarily use its rights as a shareholder to reduce the risk of further violations. The bank will also analyse a company’s connection to the violation. It is to consider the likelihood of future violations, the scope of the company’s operations and its willingness to implement changes. Remedial action for those affected will also be important.
The threshold for excluding companies is to remain high. Under the proposal, Norges Bank should primarily use its rights as a shareholder to reduce the risk of further violations. The bank will also analyse a company’s connection to the violation. It is to consider the likelihood of future violations, the scope of the company’s operations and its willingness to implement changes. Remedial action for those affected will also be important.
The final decision is to be made by Norges Bank’s managers, the entity responsible for the fund.Photo: Flickr.com/Norges Bank/CC BY-ND 2.0
Nuclear weapons manufacturers may return. Politicians respond
The report also provides for a change in the rules concerning nuclear weapons manufacturers. Companies headquartered in recognised nuclear powers that belong to NATO could return to the GPFG portfolio. This concerns businesses from the United States, the United Kingdom and France. The possibility of investing in them again could apply to companies such as Lockheed Martin, Boeing, General Dynamics, BAE Systems and Airbus. Gjedrem justifies the proposal by citing the changed security situation, the expansion of Norway’s armed forces and the growing importance of NATO’s nuclear umbrella.
The proposals have prompted opposition from some Norwegian politicians. Kirsti Bergstø of the Socialist Left Party (SV) and Oda Indgard of the Green Party (MDG) criticised the weakening of the Council’s role and the possibility of investing in nuclear weapons manufacturers. Bjørnar Moxnes of the Red Party (Rødt) warned against reducing the importance of violations of international law in investment decisions. Henrik Asheim of the Conservative Party (Høyre) assessed the report differently, calling it a good starting point for developing predictable rules for managing the fund.
The proposals have prompted opposition from some Norwegian politicians. Kirsti Bergstø of the Socialist Left Party (SV) and Oda Indgard of the Green Party (MDG) criticised the weakening of the Council’s role and the possibility of investing in nuclear weapons manufacturers. Bjørnar Moxnes of the Red Party (Rødt) warned against reducing the importance of violations of international law in investment decisions. Henrik Asheim of the Conservative Party (Høyre) assessed the report differently, calling it a good starting point for developing predictable rules for managing the fund.
The background to the current dispute is the temporary ethical guidelines introduced by Stoltenberg in the autumn. After the Council was stripped of its right to recommend exclusions, international law specialist Cecilie Hellestveit resigned her membership in protest. The government is to present its own proposals in the spring in a document submitted to the Norwegian parliament.
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